New Funding and Grace Period Offered for PRF Period 1 Reporting

The U.S. Department of Health and Human Services (HHS) announced that $25.5 billion in new funding is available to assist health care providers affected by the COVID-19 pandemic. You may read the entire announcement here

“This funding critically helps health care providers who have endured demanding workloads and significant financial strains amidst the pandemic,” said Xavier Becerra, HHS Secretary. 

Here is how HHS is allocating the $25.5 billion:

$8.5 billion in American Rescue Plan (ARP) resources
  • This portion of funds is designated for providers serving rural Medicaid, Children's Health Insurance Program (CHIP) or Medicare patients. In addition to meeting the criteria for serving patients in rural areas as defined by the HHS Federal Office of Rural Health policy, a provider’s eligibility for funds will generally be based on Medicare reimbursement rates.
$17 billion for Provider Relief Fund (PRF) Phase 4

This portion is available to providers with documentation of revenue losses and expenses tied to the pandemic, specifically:

  • Providers’ lost revenues and expenditures between July 1, 2020, and March 31, 2021. 
  • Reimbursing smaller providers operating on thin margins while serving vulnerable and/or isolated communities. These organizations tend to incur lost revenues and COVID-19 expenses at a higher rate. 
  • Bonus payments for providers serving Medicaid, CHIP and/or Medicare patients, priced at the generally higher Medicare rates to ensure equity for those serving low-income children, pregnant women, people with disabilities and seniors. 

You can read more details regarding ARP and PRF allocations here.

How to apply 

The application portal will open on Sept. 29, 2021.

Providers may apply for both ARP and PRF segments through a single application. Payments will be calculated based upon existing U.S. Health Resources and Services Administration. (HRSA) Medicaid, CHIP and Medicare claims data. PRF recipients must notify the HHS Secretary of any merger with, or acquisition of, another health care provider during the period in which they can use the payments. Providers should also be aware of the increased risk of an HRSA audit similar to past PRF guidelines. 

Extended grace period 

The alert also detailed a grace period for the PRF Period 1 reporting deadline. Because providers continue to face challenges of the Delta variant and natural disasters due to extreme weather, HHS also announced a 60-day grace period for PRF Period 1 reporting. Originally scheduled for Sept. 30, 2021, providers now have until Nov. 30, 2021, to come into compliance. 

However, if you are prepared to meet the Sept. 30, 2021, deadline, DHG encourages you to file your reporting if practical. Completing your PRF reporting sooner than later frees management to focus on other challenges and opportunities. 

Payment resources

If you have questions about how HHS calculates PRF Phase 3 payments, the HHS has also provided details of their methodology, which can be accessed here

Additionally, should you believe that your Phase 3 payment was calculated incorrectly, HHS announced that they will soon share a process that allows providers to request a reconsideration. 

How DHG Healthcare can help

Should you have questions on how the new funds, grace period and payment reconsiderations impact your organization, the professionals at DHG Healthcare stand ready to help you explore your options and navigate your next steps. 

As details emerge from HHS, look to DHG Healthcare to provide context and best practices for your consideration. 

We look forward to learning how we can help you. 

ABOUT THE AUTHORS

Scott Spohn
Partner, DHG Healthcare
Scott.Spohn@dhg.com

Kelly Smith
Senior Manager, DHG
kelly.smith@dhg.com

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